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> Posted by Kim Wilson
Predictably, the long tentacles of financial inclusion have coiled themselves around the most vulnerable targets of humanitarian aid: low income refugees, migrants and displaced populations (hereon: “refugees”).
Just as predictably, the financial inclusion agenda is driven by suppliers (aid providers, donors, financial intermediaries and governments). Few refugees are demanding to be included in a digital/formal ecosystem. That does not mean they don’t appreciate the shelter, food and cash that humanitarian agencies have mustered on their behalf. They do. They also appreciate the efforts of those same agencies to make cash assistance easier. E-cash that can be transformed into physical cash at convenient times and places is an example. Use of debit cards at ATMs to withdraw cash from digital accounts can cut valuable time otherwise spent waiting in long cash distribution queues. Very appreciated, indeed.
> Posted by Sonja Kelly, Director of Research, CFI
A customer waits to collect money at the Juba Express money transfer company in Mogadishu, Somalia.
This post is part of a series examining the global phenomenon of de-risking and its impact on financial inclusion. To investigate this issue, CFI staff partnered with Credit Suisse Global Citizen Rissa Ofilada, a compliance lawyer based in the Philippines, to undertake a literature review and conduct interviews with key players in the conversation on de-risking.
This is not a rhetorical question—I really do want to know. As we’ve put out a modest blog series about de-risking, I’ve been thinking about regulations on anti-money laundering and combating the financing of terrorism (AML/CFT). Are stringent regulations and dramatic consequences for non-compliance really necessary? Is it fair to expect the financial system to bear so large a burden? Would it be better for everyone if the onus were on law enforcement to detect and eliminate illicit activity and financial institutions just had to cooperate where necessary?
> Posted by Jeffrey Riecke, Communications Specialist, CFI
You could say it’s like watching a car crash in slow motion. In certain industries, for talented individuals, as sure as their rise to fame is their fall to bankruptcy, or at least, to mountains of debt. Ever since the meteoric rise of certain cash-bloated industries, like sports, music, and film, to name a few, we’ve seen star after star go from being set-for-life to being, astonishingly, in dire financial straits.
The latest to be added to this list? Kayne West. The divisive hip-hop titan and cultural icon recently revealed that he is more than $50 million in personal debt*. The announcement came a few weeks ago at the tail end of the media circus surrounding his most recent album release. Along with the album, he launched a new fashion line – both to generally positive reviews. Arguably at the height of his talents in both pursuits, one wouldn’t suspect Mr. West of being in the red. In fact, in multiple songs on his new album his lyrics suggest otherwise: “10 thousand dollar fur for Nori, I just copped it, yo!” (Nori is his two-year-old daughter, who does indeed dress very well.) Kanye’s financial problems are so great that he took to Twitter to publicly ask Facebook CEO Mark Zuckerberg and Google Co-Founder Larry Page for money so that he could continue to make his art. It remains to be seen if the tech billionaires will bankroll the self-proclaimed “most important living artist”.
Along with Kanye, famous musicians who have gone bankrupt over the years include Marvin Gaye, David Crosby, Vanilla Ice, Jerry Lee Lewis, MC Hammer, and George Clinton. We could go on. Big names, which alludes to a big (and potentially growing) problem.
In the world of professional sports, financial stress is extremely well-documented. By the time they have been retired for two years, 78 percent of National Football League (American football) players have either gone bankrupt or are under financial stress. Within five years of retirement, roughly 60 percent of former National Basketball Association players are broke.
How does this happen? And should we care?
> Posted by Center Staff
On Wednesday, a new joint-initiative was launched that puts free financial education lessons into the phones of Tigo’s seven million mobile subscribers in Colombia. The service, Su Dinero (Your Money), features online financial education content from Microfinance Opportunities (MFO) tailored to the local Colombian context. Supported by project partners DAI and Souktel, the financial education platform is housed on Facebook’s Internet.org phone application. Though web-based, the app can be accessed by Tigo’s mobile subscribers without cost or data charges due to the businesses’ unique arrangement, aligned with Internet.org’s social mission: extending affordable internet access to the five billion people around the world who don’t have it.
Less than a third of the global population use internet-based financial or commercial services. By and large this isn’t a reflection of a lack of connectivity, as mobile phone reception now covers about 85 percent of the inhabited world, although smart phones penetration is far lower. Internet.org, founded by Facebook in 2013, is out to make internet access 100-times more affordable and increase uptake worldwide by targeting the following barriers: cost of devices; cost of service plans; lack of content in local languages; limited availability of power sources; difficulty in networks supporting large amounts of data; lack of awareness of the value of the internet; and remaining gaps in mobile network connectivity.
> Posted by Danielle Piskadlo, Manager, Investing in Inclusive Finance, CFI
It is expensive to be poor. Case in point, if you don’t have access to a bank account and need to send money to a friend or family in a different location, often your only choice is an expensive cash wiring service. Last year the World Bank found that the average cost of remittance services worldwide was 9 percent.
Well, these rates could be changing quicker than anticipated. On the heels of rumors that Facebook is preparing to offer money transfer services, it was officially announced that Walmart will be offering cash transfers for customers between stores, and doing so at their famous Walmart prices.
Say what you will about Walmart, it is hard to dispute that they know how to lower prices. At least initially, they will provide cash transfer services at significantly cheaper rates than most money transfer service providers. For instance, to send $900 between Walmart stores would only cost customers $9.50, a Walmart press release indicates. Transferring the same amount via Western Union would cost at least $52, according to their online price estimator, calibrated for my sending city of Boston.